T-Mobile (TMUS.O) faced a slower-than-expected subscriber growth in the first quarter of 2025, adding 495,000 new monthly bill-paying customers, which fell short of the 506,400 expected by analysts, according to FactSet. While T-Mobile still managed to outperform its competitors, including AT&T (T.N), which added fewer subscribers, and Verizon (VZ.N), which lost customers during the same period, the company’s performance highlighted the growing competition in the increasingly saturated U.S. telecom market.
The first quarter results showed a more than 5% drop in T-Mobile’s stock price after hours, reflecting investor concerns about the company’s ability to continue growing in a challenging market. As the U.S. telecom industry faces fierce price competition, operators have been leaning heavily on promotional offers, price locks, and bundled deals to retain and attract customers. T-Mobile, known for its aggressive customer acquisition strategies, has had to respond by increasing its efforts to protect market share, especially as its rivals ramp up their own marketing efforts.
In response to these challenges, T-Mobile’s prepaid unit recently launched four new plans that offer a five-year price guarantee with monthly charges as low as $25 per line. These plans are designed to help the company remain competitive amid increased price sensitivity among consumers. Additionally, T-Mobile has plans to launch its innovative satellite-to-cell service powered by SpaceX’s Starlink in July 2025, with an introductory price of $10 per month for the service, which will be maintained for at least a year. This move is part of T-Mobile’s broader strategy to differentiate itself from competitors by introducing cutting-edge technology.
Despite these challenges, T-Mobile’s overall revenue showed growth, rising 6.6% to $20.89 billion, surpassing analysts’ expectations of $20.62 billion. T-Mobile’s CEO, Mike Sievert, mentioned during a call with analysts that the company has not yet observed any material impact from the tariffs on mobile handsets, although he acknowledged that if the tariffs lead to higher prices for devices, it could slow down upgrade rates.
T-Mobile also raised its 2025 adjusted EBITDA forecast, now projecting a range between $33.2 billion and $33.7 billion, up from its previous range of $33.1 billion to $33.6 billion. This reflects the company’s cautious approach amid a shrinking pool of potential customers in the U.S. telecom market. Analyst Jonathan Chaplin from New Street Research noted that T-Mobile’s conservative guidance for EBITDA indicates its preparations to invest more in customer acquisition and retention efforts.
While T-Mobile’s Q1 performance raised some concerns about its ability to drive strong subscriber growth, its solid revenue growth, new prepaid offers, and plans for Starlink-backed satellite services indicate that the company is working to maintain its position in the increasingly competitive telecom space. However, analysts continue to emphasize the importance of adapting to ongoing market conditions and managing costs efficiently in order to sustain its market leadership.